UPDATE: Morgan Stanley Upgrades American Electric Power Company to Overweight, Raises PT on Position as Standout Utility

In a report published Monday, Morgan Stanley analyst Stephen C. Byrd upgraded the rating on American Electric Power Company AEP from Equal-Weight to Overweight, and raised the price target from $44.00 to $52.00. In the report, Morgan Stanley noted, “We believe the company delivered on its promise to provide investor clarity over the next several years and highlighted that its transition to more of a regulated utility is progressing well (versus one that is diversified). Although we believe there is not considerable value associated with the merchant operation, this business is not a significant contributor to EPS (management noted it contributes less than 2% to 2016 EPS). We see growth in earnings being driven by robust transmission investment and core utility growth, thus we see limited risk in the company meeting consensus expectations and we now believe they are more likely to exceed them given the upside to company guidance on the transmission front.” American Electric Power Company closed on Friday at $47.84.